Israel-Iran Conflict Sparks Oil Price Surge As Strait Of Hormuz Faces Closure Risk
Escalating tensions between Israel and Iran have sent global oil markets into turmoil, driving Brent crude prices to a peak of $78.50 per barrel, the highest since January, following an Israeli strike on Iran. Prices surged by $4.68 from the previous day, settling at $74.04. Iran's threats to close the Strait of Hormuz, a vital chokepoint for one-fifth of the world's oil supply, have heightened fears of a global energy crisis.
A potential closure of the Strait could disrupt millions of barrels of daily oil shipments, pushing Brent crude prices to $120 per barrel from the current $77. Such a spike would ripple through global economies, inflating fuel costs and impacting sectors from transportation to food production. Analysts warn that targeting Iran's oil production and export facilities could drive prices to $80-$100 per barrel, leading to historic pump price increases in import-dependent nations like Turkey and Spain.
The conflict has already caused a 13% rise in Brent crude prices, exacerbating inflationary pressures and threatening global economic growth. Some investors are shifting to safe-haven assets like gold, which has risen in value. Russia, despite its own economic challenges, could benefit from higher oil revenues, with each $5 price increase boosting export earnings significantly.
Global stock markets have reacted, with the Dow Jones Industrial Average dropping 1.79% amid broader economic concerns. Energy traders remain on edge, monitoring for further escalation. While some experts suggest the situation could stabilize, as seen in previous Israel-Iran clashes, any disruption in the Strait of Hormuz could trigger catastrophic economic consequences worldwide.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Int'l Business Times
a day ago
- Int'l Business Times
Israel-Iran Conflict Sparks Oil Price Surge As Strait Of Hormuz Faces Closure Risk
Escalating tensions between Israel and Iran have sent global oil markets into turmoil, driving Brent crude prices to a peak of $78.50 per barrel, the highest since January, following an Israeli strike on Iran. Prices surged by $4.68 from the previous day, settling at $74.04. Iran's threats to close the Strait of Hormuz, a vital chokepoint for one-fifth of the world's oil supply, have heightened fears of a global energy crisis. A potential closure of the Strait could disrupt millions of barrels of daily oil shipments, pushing Brent crude prices to $120 per barrel from the current $77. Such a spike would ripple through global economies, inflating fuel costs and impacting sectors from transportation to food production. Analysts warn that targeting Iran's oil production and export facilities could drive prices to $80-$100 per barrel, leading to historic pump price increases in import-dependent nations like Turkey and Spain. The conflict has already caused a 13% rise in Brent crude prices, exacerbating inflationary pressures and threatening global economic growth. Some investors are shifting to safe-haven assets like gold, which has risen in value. Russia, despite its own economic challenges, could benefit from higher oil revenues, with each $5 price increase boosting export earnings significantly. Global stock markets have reacted, with the Dow Jones Industrial Average dropping 1.79% amid broader economic concerns. Energy traders remain on edge, monitoring for further escalation. While some experts suggest the situation could stabilize, as seen in previous Israel-Iran clashes, any disruption in the Strait of Hormuz could trigger catastrophic economic consequences worldwide.
Int'l Business Times
2 days ago
- Int'l Business Times
Oil Prices Soar, Stocks Slide After Israel Strikes Iran
Oil prices soared and stocks sank Friday after Israel launched strikes on Iran, prompting retaliation from Tehran and stoking fears of a full-blown war. Oil futures rocketed more than 13 percent at one point before coming back to gains nearer seven percent, reigniting worries about a renewed spike to inflation. After a down day in Europe and Asia, Wall Street indices spent the entire day in the red before finishing the day down more than one percent. "After having a pretty solid run in May and the first part of June, markets found an excuse to take some profits," said Art Hogan, chief market strategist of B. Riley Wealth. Shares in major airlines tumbled after flights around the Middle East were suspended. The dollar climbed higher, while gold -- viewed as a safe haven investment -- was close to its record high of above $3,500 an ounce set in April, having added around 30 percent since the start of the year. The drop in equities and rise in safe-haven assets "all go to show just how fragile sentiment remains in the face of major geopolitical events," said David Morrison, senior market analyst at financial services provider Trade Nation. "The question now is whether investors view this flare-up as a relatively contained incident within the longstanding animosity between Israel and Iran, or if this is the spark that ignites a conflagration across the Middle East and then beyond?" On Friday, Iran fired a barrage of ballistic missiles at Israel in a counter-strike just hours after the Israeli strikes targeting the Islamic republic's nuclear facilities and bases. Air raid sirens and explosions rang out across Israel after Prime Minister Benjamin Netanyahu took to the airways to issue a word of caution, saying he expected "several waves of Iranian attacks" in response. Smoke could later be seen billowing above the skyscrapers in downtown Tel Aviv, according to an AFP journalist, as Iran's Revolutionary Guards said they had attacked dozens of targets in Israel. While Friday was a decisively negative day for equities, analysts described the selling as orderly. Investors "are paring back some risk, but this is hardly a panicky sell-off," said Steve Sosnick of Interactive Brokers. The market is partially in "a wait and see approach to what happens over the weekend because it's obviously a very fluid volatile situation," Sosnick added. But further escalation would add more upward pressure to oil prices. Matthew Ryan, head of market strategy at global financial services firm Ebury, said: "The big fear for investors is that an escalation to the tensions will not only raise the risk of a prolonged conflict, but it could disrupt Iranian oil production." Rising oil prices have "broader implications," Ryan said, noting that they "could both weigh on the global growth outlook and keep inflationary pressures higher for longer." This would complicate the decision-making of major central banks, which will have to decide between raising interest rates to curb inflation or cutting them to stimulate economies. Brent North Sea Crude: UP 7.0 percent at $74.23 per barrel West Texas Intermediate: UP 7.3 percent at $72.98 per barrel New York - Dow: DOWN 1.8 percent at 42,197.79 (close) New York - S&P 500: DOWN 1.1 percent at 5,976.97 (close) New York - Nasdaq Composite: DOWN 1.3 percent at 19,406.83 (close) London - FTSE 100: DOWN 0.4 percent at 8,850.63 (close) Paris - CAC 40: DOWN 1.0 percent at 7,684.68 (close) Frankfurt - DAX: DOWN 1.1 percent at 23,516.23 (close) Tokyo - Nikkei 225: DOWN 0.9 percent at 37,834.25 (close) Hong Kong - Hang Seng Index: DOWN 0.6 percent at 23,892.56 (close) Shanghai - Composite: DOWN 0.8 percent at 3,377.00 (close) Euro/dollar: DOWN at $1.1540 from $1.1584 on Thursday
Int'l Business Times
2 days ago
- Int'l Business Times
Airlines Halt Many Middle East Flights After Israel Hits Iran
Global airlines on Friday cancelled flights to Tel Aviv, Tehran and other Middle East destinations, or rerouted planes, as airspaces shut following Israeli strikes on Iran. Israel, Iran, Iraq, Jordan and Syria closed their airspaces after Israel hit military and nuclear facilities in Iran. Israel said Tehran launched drones in retaliation. Air India's New Delhi-Vienna and Mumbai-London flights were about to enter Iranian airspace when Israel launched its attack, forcing the planes to turn back to their origin, according to aircraft tracker Flight Aware. Its London-New Delhi flight had just entered Iranian airspace and was rerouted over Iraq before arriving in India one hour late, according to Flight Aware. Air India diverted or called back a total of 16 flights between India and London and cities in Canada and the United States "due to the emerging situation in Iran". Emirates, the Middle East's largest airline, cancelled flights to and from Iraq, Jordan, Lebanon and Iran after Israel launched the strikes. Qatar Airways, the country's national carrier and one of the Middle East's largest, said it had "temporarily cancelled flights to Iran and Iraq due to (the) current situation in the region". Air France said it was suspending its flights to and from Tel Aviv "until further notice" following the closure of Israeli airspace. "Air France is closely monitoring the situation in the Middle East in real time," a spokesman for the French airline told AFP, adding that "the safety of its customers and crews is its absolute priority". Russia's aviation authority Rosaviatsiya instructed Russian airlines not to fly "in the airspace of Israel, Jordan, Iraq and Iran" or use airports in Israel and Iran. It said the restrictions will stay in place until June 26 or until further notice. German airline group Lufthansa suspended flights to and from Tehran until July 31. It also extended the suspension of Tel Aviv flights for the same period. Swiss airline, which is owned by Lufthansa, suspended its Tel Aviv flights until October 25 while those to Beirut were suspended until the end of July. In the United Arab Emirates, Abu Dhabi airport warned "flight disruptions are expected through today (Friday)" as a result of the Israeli strikes. Dubai's airport also announced flight delays and cancellations due to the closure of airspaces in Iran, Iraq and Syria.
